Many Michigan residents have invested in Bitcoin and other forms of cryptocurrency. Digital assets, including forms of digital currency like Bitcoin, can be notoriously difficult to value, and they can complicate the process of property division in a divorce. In some cases, according to a report from CNBC, spouses might attempt to hide or conceal assets by investing in Bitcoin or other forms of cryptocurrency. If you currently own Bitcoin, you may wonder: will I lose my Bitcoin in divorce? The answer to that question will depend upon facts that are specific to your case. Our Michigan divorce attorneys can explain in more detail.
Determine Whether Bitcoin is Separate or Marital Property
When you are trying to determine whether you will lose your Bitcoin in a divorce, the first issue to consider is whether your Bitcoin is likely to be classified as separate (i.e., nonmarital) property or as marital property. Under Michigan law, all property owned by divorcing spouses is classified as separate or marital property, and then only marital property is divisible in the divorce. To be clear, if your cryptocurrency is classified as separate property, it will not be subject to division, and you will be able to keep it. However, if your cryptocurrency is classified as marital property, it will be subject to division.
What determines how property is classified? Generally speaking, any assets acquired before the date of your marriage will be classified as separate property. Most assets acquired after the date of marriage will be classified as marital property, with a few exceptions. If you purchased your Bitcoin before the marriage, it may be separate property. Even if you purchased it after the date of the marriage but paid with separate assets, the Bitcoin may still be separate property. However, if you purchased the Bitcoin with money earned after the date of your marriage, you should anticipate that the court will classify the cryptocurrency as marital property, and it will be subject to equitable distribution.
Equitable Division of Marital Property Can Include Bitcoin
If your Bitcoin is classified as marital property, as we noted above, then it will be subject to Michigan’s equitable distribution rules. What that means is that the court will look at a wide range of factors in determining how to divide your Bitcoin along with other marital property in a manner that the court considers to be fair to you and to your spouse.
If you do not want to lose any of your Bitcoin, you may be able to enter into a settlement agreement with your spouse so that you keep your Bitcoin in exchange for giving up other assets.
Contact a Divorce Attorney in Michigan
Property division in a divorce can be complicated under any circumstances, but cryptocurrency tends to make the process of property division even more complex. If you have questions about how Bitcoin will be classified and divided in a divorce, you should get in touch with a Michigan divorce attorney who can answer your questions. Contact the Law Offices of Michael A. Robbins to learn more about how we can assist you.